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Suppose Ahmad has a total cost of effort of , and so a marginal cost of 6q. Bader has a total cost of effort of
Suppose Ahmad has a total cost of effort of , and so a marginal cost of 6q. Bader has a total cost of effort of 20+, and so a marginal cost of effort of 4q. The firm's marginal benefit from effort is 12. The firm can hire only one worker. Which worker should the firm hire? What pay package should it offer? Explain.
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